In short:
In this read we explore why product businesses are using invoice financing, and how they are using it as a growth lever. We'll start by covering what invoice financing is, how it works and what other alternatives there are out there.
Let's get one thing out of the way: It's not a last resort
I’ve sometimes heard that invoice financing is something you turn to when things are going badly. That’s a shame, when we see financially healthy, ambitious companies growing faster using it. Recently, a consumer brand tripled their revenue, from around 3.5 to 10 million SEK in under a year thanks to it. Another recent example shows how a distributor grew to €15 million. Keep those growth examples in mind, and we’ll look more closely at invoice financing. We’ll start by covering some basics.
What is invoice financing?
Invoice financing, or receivables financing, means borrowing against the money you’re already owed. Almost like a time machine, it's a way to advance your customer invoices.
🟪 Short definition on invoice financing (receivables): Instead of waiting to get paid, a lender pays you directly, and it’s settled once the customer pays. Example:
You’ve invoiced a retailer for £20k → Treyd pays up to 90% now → The rest settles when the customer pays
What's the difference between invoice financing and inventory financing?
Inventory financing refers to the funding you get upfront for stock, raw materials or supplier invoices, so you can buy before you sell. Both are working capital solutions that helps free up cash.
🟪 Short definition on inventory financing (payables): Instead of you paying your supplier invoice, a lender takes care of the invoice, and you pay back to the lender. Example:
You’re buying £50k of stock → Treyd pays the supplier now → You repay in 5 months
At Treyd, we cover both invoice financing and inventory financing.
What is selective invoice financing?
“Selective” simply means you choose which invoices to finance, and when. Get cash upfront, repay later. It’s a flexible tool that works around your business, not the other way around. You have the control and you don’t give up equity.
It’s a great fit if you want to:
Pay only when you use it
No ongoing fees or commitments. You only pay when you choose to finance an invoice.Stay in control
You decide which invoices to finance, and when. Total flexibility, on your terms.Get fast access
Credit limits can be approved in as little as 24 hours, so you can move quickly when it matters.Avoid offering collateral
Financing is unsecured and hassle-free – no assets or personal guarantees required.
Let’s put that in contrast to some other alternatives out there.
Whole ledger factoring – not flexible
In short: You sell all your invoices to a factoring company. They take over your entire sales ledger. This gives you less freedom, and can strain relationships with customers.
Why it’s limiting:
You lose control. Every invoice goes through the factor, whether you want to or not.
It’s usually visible to your customers, which can feel intrusive.
Harder to turn off or adjust – it’s all or nothing.
Bank credit – slow and usually harder to get
In short: Traditional funding is cautious and slow – not ideal when you need to move quickly or don’t have assets to back it up.
Why it can be a bad fit:
Long application processes with lots of paperwork.
Banks often need security or personal guarantees.
Approval can take weeks (or longer).
Not always suited for growing, asset-light businesses.
RBF (revenue based financing) – tied to future revenue
In short: You receive upfront cash in exchange for a percentage of your future sales until the amount is repaid. It’s flexible in theory, but unpredictable in practice, especially if your revenue varies month to month.
Why it can be tricky:
You repay more when you’re doing well. This can eat into margin.
You’re locked into a repayment model tied to performance, even if sales slow down.
Often geared toward DTC e-commerce brands only, not all business types.
Other options include using personal funds, or seeking investment. But investors need a slice of the pie, and you want to stay in control. And for most of us, personal funds can only take us that far.
Why product brands use invoice financing to grow
You know this all too well, cash is often tied up in unpaid invoices. Invoice financing helps free up that working capital, so you can put it to work elsewhere, and not wait weeks or months to get paid. It’s a way to grow without giving up control or equity.
Use invoice financing to stay in control:
⚓ Improving cash flow
Turn outstanding invoices into cash you can use today.
⚓ Protecting and improving margins
Keep stock moving and marketing running instead of waiting for payment.
⚓ Staying predictable
Smooth out income spikes and dips tied to customer payment cycles.
⚓ Improving runway
Extend your cash position without raising money or taking on long-term debt.
Use invoice financing to scale faster:
⚡ Launching faster
Use the advanced cash for new campaigns or channels
⚡ Hiring or expanding with confidence
Build your team knowing you have stable access to incoming cash
⚡ Growing without diluting ownership
No equity stakes, no lock-ins, just flexible financing when you need it
⚡ Say yes to time-sensitive opportunities
Like big retail orders or freight bookings
Five practical ways to use invoice financing as a growth lever
Remember the examples up top – how a product brand tripled their revenue, and how a distributor grew to €15 million? Both could act fast on growth opportunities, without pulling cash away from other parts of the business. Here's five practical ways to use invoice financing as a growth lever:
1. Launching a new product line
Instead of waiting for sales from your current range to fund the next, use invoice financing to unlock funds from recent sales — so you can reinvest in your next launch without waiting to get paid.
2. Scaling up for a retail order
Big orders can be a blessing and a strain. With cash on hand, you can say yes confidently, knowing you won’t be cash-constrained while you wait to get paid.
3. Locking in better pricing from suppliers
Early payments often come with discounts. Unlock lower unit costs – improving margins without needing to negotiate volume.
4. Leveling out seasonality
Some months are heavier on costs than others. Use it to bridge quiet months and keep your momentum. You get paid instantly, even when customers are slow to pay.
5. Running stronger campaigns
Cash tied up in long sales cycles can leave little room for marketing. Use it to free up funds for campaigns that drive sell-through, so the growth loop keeps spinning.
When invoice financing makes sense – and when it doesn't
Some trade terms, like cash against documents – may not be compatible with this model. And subscription and cash-upfront models won't work. Invoice financing works best for growing SMEs with a good track record who invoice their customers. Again, it’s not a last resort. Rather, a financial tool for growing businesses to continue growing, at their preferred pace.
How invoice financing works with Treyd
1. You sell something to a customer.
2. You issue an invoice.
3. Instead of waiting for payment, you upload that invoice to the Treyd platform.
4. You get paid most of the invoice amount instantly.
5. When your customer pays, you repay the amount together with the small fee.
With Treyd, you stay in control. Nothing is shown to your customers. You choose which invoice(s) to finance, and you set the repayment term, anywhere from 1 to 5 months. Before you hit submit, you’ll see the exact fee for that invoice upfront. No surprises, no additional costs. And if you ever need a hand? We're a partner, not a bank.
Here’s what it costs:
The fee depends on factors like your chosen repayment term and your history with Treyd. You’ll always see the fee in the platform before you hit submit.
You only pay when you use it – no setup costs, monthly fees, or hidden charges. You're even incentivized if you repay earlier.
➡️ Curious to see if you could advance your customer invoices? Get in touch.
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